Difference between domestic and imported scrap widens to INR 500/MT.
Indian steel makers are preferring domestic scrap over imported owing to lower prices. For a steel maker based in Mumbai, landed cost of domestic scrap is INR 20,500/MT, whereas landed cost of imported scrap is around INR 21,000/MT.
Higher scrap offers in global market and volatile Indian currency is currently making Indian buyers reluctant in making fresh purchases.
Imported Scrap Offers
Imported scrap offers in India remain unchanged this week as a result of dull buying. Offers from Middle East for HMS 1&2 (80:20) remained in the range of USD 275-280/MT, whereas Europe offered at USD 280-285/MT, CFR India.
HMS 1 (25 tonnes loading) is currently offered at USD 280-285/MT from South Africa and USD 290-292/MT from Middle East.
Similarly, shredded scrap remained firm at USD 300-305/MT from US and USD 305-310/MT from Europe. Strong demand in global market and appreciated Euro is currently supporting European scrap suppliers.
Whereas buyers in India, owing to continuous fall in steel prices, are very cautious about taking any position. Cheaper sponge iron & domestic scrap have created a shift of interest in the minds of manufacturers.
An importer shared, “We have very limited bookings this month, as we are unable to find buyers in the market.”
Apart from domestic issues, weak INR, also adds to the constraints while importing scrap to India. INR was last spotted at 63.76 against USD.
Tradewise
- A bulk vessel of 33,000 MT of US origin shredded scrap is expected to arrive at Chennai port by 22 May.
- 15 containers of HMS 1 (25 tonnes loading) was sold at USD 290/MT, CFR Nhava Sheva.
- 30-35 containers of HMS 1&2 of Dubai origin were settled at USD 274/MT, CFR Mundra.
- Around 1,000 MT Australian origin shredded scrap was settled at USD 290-292/MT, CFR Chennai.
- South African HMS 1 settled at USD 280/MT, CFR Chennai. Material expected to arrive by first week of June’15.
- A Janapese trader offers shredded scrap at around USD 305/MT, CFR India.
Scrap Prices as on 20 May’15
| Imported Scrap Offers in USD/MT | ||||
| Particular/Delivery | Grade/Origin | Prices | W-o-W Change | M-o-M Change |
| CNF Chennai, India | HMS(80:20),Europe | 282 | – | + 7 |
| CNF Mumbai, India | HMS(80:20),Europe | 282 | – | + 4 |
| HMS-1,Middle East | 290 | – | – 17 | |
| HMS-1&2,Middle East | 275 | – | – 25 | |
| HMS-1&2,S.Africa | 270 | – | – 5 | |
| Shredded,Europe | 306 | – | + 6 | |
| Shredded,US | 302 | – | + 5 | |
| CNF Taiwan | HMS(80:20),US | 225 | – | – 5 |
| CNF Turkey | HMS(80:20),US | 282 | – | + 15 |
| FOB Rotterdam, Europe | HMS(80:20),Europe | 250 | – | + 14 |
| Domestic Prices in INR/MT | ||||
| Ex-Mandi Gobindgarh | HMS(80:20) | 20,900 | -500 | – 750 |
| Ex-Mumbai | HMS(80:20) | 20,450 | 0 | – 650 |
| Ex-Chennai | HMS(80:20) | 18,900 | – 400 | – 800 |
Source: SteelMint Research
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